The Italian fashion group Salvatore Ferragamo booked a 10.7 percent increase in sales in the first quarter, boosted by a 21.2 percent rise at the retail division. The company said the results were higher than forecast and indicated that the economic recovery is under way and is faster than expected. The company's stores in Rome and Milan enjoyed a 20-30 percent increase in first-quarter sales largely thanks to an increase in sales to tourists.
To take maximum advantage of the upturn, the group intends to increase its advertising revenues by 50 percent this year. Ferragamo also expects its e-commerce platform, which was launched in 2009, to grow significantly over the next three years and to rank as one of its top 10 stores worldwide.
The company forecasts a double-digit increase in 2010 sales and confirms its strategy of developing its retail channel, especially in the Far East. Ferragamo has 570 mono-brand stores, of which 299 are directly managed, generating about two-thirds of its global turnover. The group plans to open about 30 stores this year, 10 of them in China. The Far East region already represents more than half of the group's sales.
Last year, Ferragamo's sales declined by 10 percent to €620 million. Nevertheless, the group managed to raise its retail sales by 2 percent. Operating income before amortization (Ebitda) fell by 28 percent to €62 million and the bottom line showed a net loss of €15 million, hit by one-time charges.